GST Rate Cuts Trigger Supply Shortages for TVs, Smartphones, and Cars

The recent GST rate cuts and tax reforms have sparked a sharp rise in consumer demand, creating an unexpected challenge for manufacturers and retailers: supply shortages across electronics, automobiles, and home appliances.

From large-screen televisions to premium smartphones, products are running out of stock in many parts of India as companies struggle to meet the sudden surge in orders, reported The Economic Times.

Electronics Industry Under Pressure

Manufacturers misjudged the post-GST demand, leaving TVs larger than 65 inches largely unavailable. While production is being ramped up, component shortages and import delays have slowed replenishment.

Smartphone brands are facing similar issues. Premium models priced above ₹30,000 experienced record sales during Navratri, and demand remains strong even after the festival, according to Tarun Pathak, Director at Counterpoint Research.

Automakers Struggle with Logistics

The auto sector, which also saw record Navratri sales, faces a shortage of car carriers ahead of Diwali, which falls on October 20. Companies are offering incentives for transporters, including paying for empty return trips, but the shortage persists.

Satish NS, President of Haier India, said:

“No one anticipated this steep demand during Navratri, aided by GST reductions. While we manage local production for up to 65-inch TVs, imported larger screens are nearly sold out.”

Mahindra & Mahindra has partnered with Indian Railways to supplement vehicle transport. Despite doubling train shipments, trailers remain the primary mode, and capacity remains limited.

Mercedes-Benz India confirmed delays in deliveries despite record September sales, while Maruti Suzuki reported 3.5 lakh bookings, including 2.5 lakh pending orders.

Retailers Rush to Restock

Appliance makers, including Super Plastronics, Haier, LG, and Godrej, have ramped up production by up to 30% where component availability permits. Festive season sales growth ranged from 25% to 100% year-on-year, highlighting the intense post-GST demand.

Transporters Under Pressure

India has around 15,000 car carriers, but only about 12,000–12,500 are operational due to maintenance or driver shortages. Incentives range from ₹2,000 to ₹8,000 per car, yet strict conditions and delivery targets create challenges for transport companies.

Transport executives noted that fleets are running at full capacity, with some trailers even returning empty — a rare and costly measure.

The Bigger Picture

While GST rate cuts have boosted consumer sentiment and spending, they have also exposed gaps in manufacturing and logistics capacity. As demand continues to rise during the festive season, companies must carefully manage supply shortages to meet consumer expectations and avoid disappointing customers.